Will Rockhopper Exploration's (RKH) Sea Lion project be sanctioned? Getting the green light for an oil field in a historically-contested part of the world was never going to be easy, particularly given the indebtedness of its operating partner and an initial price tag of $1.5bn (£1.05bn). But with Brent crude touching $74 on the day the Aim-traded group released its full-year numbers, and Premier Oil’s gearing presumably unwinding, Rockhopper couldn’t wish for better circumstances in today’s energy market.
To the believers, 2017's results will serve as another article of faith. The funding package for phase one of Sea Lion is “progressing”, a field development plan is now “substantially” agreed with the Falkland Islands government, and a public consultation process for an environmental impact statement had been completed. A final investment decision is still expected by the end of this year.
Short of appointing a lead banker, and while the market remains doubtful, Rockhopper has at least ensured that cash flows from its Egyptian production now cover all general and administrative costs. Over the course of a tricky two years, the cash balance has halved.
On average, analysts expect a pre-tax loss of $8.8m and a loss per share of 1.4¢ in 2018, compared with estimated losses of $8m and 2¢ last year.
| ROCKHOPPER EXPLORATION (RKH) | ||||
| ORD PRICE: | 25p | MARKET VALUE: | £ 114m | |
| TOUCH: | 24.7-25p | 12-MONTH HIGH: | 28p | LOW: 17.8p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 92¢ | NET CASH: | $50.7m* | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2014** | 1.9 | -7.6 | -2.6 | nil |
| 2015 | 4.0 | -45.0 | 3.7 | nil |
| 2016 | 7.4 | 98.1 | 22.0 | nil |
| 2017 | 10.4 | -9.0 | -1.3 | nil |
| % change | +40 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| £1=$1.42. *Includes term deposits of $30m. **Nine-month period to 31 Dec | ||||
